inflation can be improved by aggregating forecasts of subindices of the Harmonized Index of Consumer Prices (HICP) as opposed to … distinguishes between different forecast horizons, HICP components and inflation measures. Various model selection procedures are … component does not necessarily help forecast year-on-year inflation twelve months ahead …

Two rationales offered for policymakers' focus on core measures of inflation as a guide to underlying inflation are … that core inflation omits food and energy prices, which are thought to be more volatile than other components, and that … core inflation is thought to be a better predictor of total inflation over time horizons of import to policymakers. The …

Policymakers tend to focus on core inflation measures because they are thought to be better predictors of total … inflation over time horizons of import to policymakers. The authors find little support for this assumption. While some measures … of core inflation are less volatile than total inflation, core inflation is not necessarily the best predictor of total …